Johnson Controls, Zillow Group, Oracle: Trending tickers

Johnson Controls International (JCI) shares declined in Tuesday’s trading after quarterly results missed estimates and 2024 profit guidance also disappointed. The fallout from a recent cyberattack on the company is also predicted to continue to affect the company into the first quarter.

JMP Securities upgraded Zillow Group (Z) to “Outperform” from “Perform,” arguing that consensus estimates are too low and that housing will benefit from a decline in interest rates. The firm believes Zillow can navigate hurdles from the antitrust ruling on real estate practices.

Oracle (ORCL) shares dropped after softer second-quarter cloud revenue. For some analysts and investors, the results underscore Oracle’s struggles gaining share against dominant cloud providers like Amazon (AMZN) and Microsoft (MSFT).

For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.

Video Transcript

JOSH LIPTON: The shares of Johnson Controls International, let’s start there, sliding following its fourth quarter results. The company missing estimates on the top and bottom lines. The company also reporting lower-than-expected earnings guidance. And I think that was key here. It does come down, it sounds like here, Julie, to the forecast. Adjusted earnings for fiscal ’24 below what the Street had been looking for.

So the company, which makes fire heating, cooling, and security equipment, sees 365 to 380 a share. Street was close to 392, it looks like. And they reported Q4 results as well.

JULIE HYMAN: Yeah. And we were just talking about cyber threats, right? And that was one of the issues for Johnson Controls. It had undergone a cyber attack. And there were some optimism or hopes that effect would be limited, but it sounds like it’s going to stretch into the first quarter. That’s part of the reason why the forecast is below estimates. So that’s something that analysts are talking about.

And analysts are also talking about weak demand in China as something that is weighing on the firm. So not surprising then to see the pressure that the stock is under in today’s session. It’s one of the worst performing stocks in the S&P 500 on the day, so.

JOSH LIPTON: Yeah. Citi, interesting as well, by the way, in a note to clients, saying the company needs to do a better job in underpromising and overdelivering on what appears to be solid underlying demand. But they stay on the sidelines. Citi is neutral, target is 61. Not a great year if you’re long this name stocks down about 20%.

JULIE HYMAN: Yeah. All right. Let’s look at Zillow as well. That stock is getting a lift after analysts at JMP Securities upgraded it to market outperform from market perform. The firm noting consensus estimates for Zillow are too low for 2025 and 2026 here.

And they did acknowledge that recent ruling that we heard about that affects the structure of the real estate industry and how commissions are paid out to brokers, they said, that could cause some volatility in the short term, but that Zillow ultimately will hold up OK.

JOSH LIPTON: Yeah. The key line here for them, I think, seems to be we believe consensus estimates are too low for ’25 and ’26, given, they say, pent-up demand, increasing expectations, that rates will begin to come down in the back half of next year. Though, to your point, Julie, they do acknowledge, listen, the stock could be volatile here in the near term on those headlines about antitrust litigation.

JULIE HYMAN: Exactly. Well, I mean, we keep talking with housing expert after housing expert that says things have to eventually get a little bit better.

JOSH LIPTON: At some point.

JULIE HYMAN: So one would think that Zillow would benefit from that.

JOSH LIPTON: All right. We’re going to end here on shares of Oracle dropping today. Dropping is the nicest way we can put That you might say hammered, crushed, downward, 12%. Company missed adjusted revenue estimates as cloud sales in the second quarter disappointed.

So even the bulls on the name were certainly disappointed with this print here, saying this was disappointing. The topline miss driven they said by weaker than expected OCI revenue. So they’re referring there to Oracle Cloud Infrastructure, which is their public cloud service competing with all the big guys, Amazon, Microsoft.

You did hear Oracle management. They talked about their pipeline, Julie, big deals on the way. But I know at least some analysts felt like, they just had more questions than answers after that call.

JULIE HYMAN: Yeah. I mean, the company has really banked its future in part on cloud infrastructure. And that growth was just not what analysts had been predicting here. The company kind of said, well, it was because of capacity issues, not because of demand issues. But still, that didn’t really mitigate declines. The stock ultimately having its biggest intraday decline since September 12th.

I checked– I just checked to see if it finished off the lows of the session. It did buy, but not by much. At its lows, it was down 12 and 1/2%. And it’s finished down 12%.

JOSH LIPTON: It had a nice run into the print. It was up about 40% but getting shelled today.

JULIE HYMAN: Yeah, definitely.

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